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Well I disagree here. And that is as someone who bought a new house when we moved here in the Summer of 2009. We looked at a lot of areas and w=once we decided on a location - yes there were some existing homes on the market, but we still ha d alot of construction going on in Ayrsley as well. Given our options - we bought a new one so we could have it exactly the way we wanted it from the get go without having to deal with any remodeling. Saved a lot less $ and time for us in the long run.
Is that selfish? Possibly. But if someone is forking over a very significant amount of cash (likely the largest purchase of their life) I think they have every right to be.
Tober - just wanted to clarify . . . I was specifically referring to stopping the building permits on houses due to a glut of houses on the market - a temporary measure - until we get some of the inventory sold. I was not referring to folks who moved here since 2002 or so when the building started really gearing up. We had to create housing at that time to accommodate all the folks who were relocating here, so it was pretty standard for people to build a home in new areas simply b/c that is where the housing was available.
I would just like to see a slow down on homes at this point in time, so we can avert (hopefully) some foreclosures and get inventory of houses - many of which are less than 4-5 years old - reduced.
I'm failing to see how uptown high rises reflect the single family residential market...specifically how they indicate there was a housing boom. ...
Skyscrapers appearing where there should be none are a sign that is something is very wrong. There are only 3 places where skyscrapers show up.
Land pressures demand it. There is no place left for the growing population. Hong Kong would be an example.
Prestige - Certain industries still operate on the 1950s notions of huge trophy buildings indicate corporate power. Banks are examples.
Real estate speculation in an area where there is a huge amount of irresponsible land development (boom) taking place.
#3 describes a lot of downtown. At one point Charlotte had over 6000 high rise condos proposed and/or under construction. Now it is a broken mess of severed dreams. This sort of thing does not take place in areas where there is housing being created to meet regular demand. While this was going on the area was also being strip mined with starter home and McMansion development. I believe that Charlotte has annexed about 80 sq/miles since 2000 and this does not include development in the municipalities surrounding the city. This is a 33% increase in the land area of a 240 year old city in just 8 years.
But the most damning statistic is this. The median price for a home in Charlotte rose ~80% from 2000-2008 while the median household income actually dropped. It's an unsustainable and disasterous situation as this is something that can't exist in reality as much as people wish to deny it and it will come crashing down. if this wasn't bad enough household income is still in free fall.
Two words "option ARM"...a new wave of resets is starting. They will likely have a bigger effect in other places, but there is nothing but downside in home prices in the near term...
I'm not so sure. The majority of other places have seen bad foreclosure times already. I'm not going to call it the worst, but it's sure as heck bad.
I agree. I think the worst is over. Last year prices were dropping like crazy. I see it has stabilized somewhat. We'll probably see a slow decline for the next few, maybe several years. I don't think we'll see another crash like in RE prices like we did in 08-09 here.
Quote:
Originally Posted by Ani;
However, many of them continue to want a new home and no one is curbing building permits, b/c this keeps folks employed. It is crazy stuff . . . building new houses with hundreds in every area of the city on the market for bargain prices, but it is a mentality (I gotta have a new house!!!)
Well it's not just the mentality of 'gotta have a new house,' it's the mentality of it's cheaper, it's new and less problems with maintenance. Can't say I blame people. I know my mentality it's not about a new home, it's about a home that doesn't have an expensive laundry list of repairs the moment you close. From new roof, HVAC, updating electrical, plumbing issues, etc etc. And then on top of that overpricing the home 40-150K. I do think though, if a resale homeowner prices their home correctly it sells.
The listings that sit is either because it's overpriced, location (beside a hwy or a ditch in the yard) or something majorly wrong with it. And those types of homes sit in any market.
Quote:
Originally Posted by The Native 1
Agreed Ani. The mentality of I gotta have a new house kind of sickens me. It seems pretty wasteful with all of the houses on the market.
I understand the issue of being wasteful. Overall though I think it's risky to purchase a brand new home. I'm surprised people still are building. I don't think it's worth the potential loss of 50K or more just to be able to design the layout of the home and having something new.
SHEENIE - totally understand what you mean about buying a home with a laundry list of things that have to be done. That can be a sinkhole for $$$$!!! I was referring to homes built in the last few years, that are sitting in inventory.
When I was younger, rehabbing a house was not that daunting to me. At this stage of my life, I really don't want to have to start replacing everything from roof to heat pump the first year of ownership. A house 4-6 years old usually (depending on materials and construction, of course) means things are still in pretty darn good shape. I consider something "older" after it hits 20 years and hasn't had major improvements like new roof, appliances, HVAC, etc. Those situations can really get expensive to replace - and annoying, as well.
The median price for a home in Charlotte rose ~80% from 2000-2008 while the median household income actually dropped.
My guess would be that this increase in home prices, at least in part, was fueled by transplants to Charlotte coming from places where home prices had risen at a more drastic rate (in terms of dollars) and, as a result, we had an influx of people who had sold off that home in their previous location, and had made a tidy little profit ( $50k, $75k, $100k, etc) that they could turn around and use on a downpayment for a home here. Which led to the purchase of more expensive homes.
That said, could you please cite the source of your data above?
Median home prices in Charlotte rose from $131,500 in 2000 to $188,400 in 2008. This reflects an increase of ~43%, not 80%.
Median household income in Charlotte went from $46,975 in 2000 to $52,530 in 2008. An increase of just over 12% (not a decrease). Although this appears to be simply gross income and not adjusted for inflation or other factors.
Tober - just wanted to clarify . . . I was specifically referring to stopping the building permits on houses due to a glut of houses on the market - a temporary measure - until we get some of the inventory sold. I was not referring to folks who moved here since 2002 or so when the building started really gearing up. We had to create housing at that time to accommodate all the folks who were relocating here, so it was pretty standard for people to build a home in new areas simply b/c that is where the housing was available.
I would just like to see a slow down on homes at this point in time, so we can avert (hopefully) some foreclosures and get inventory of houses - many of which are less than 4-5 years old - reduced.
Gotcha!
Although I was responding more to Native1's comments than to yours.
Although I was responding more to Native1's comments than to yours.
I thought you probably read that and knew what I meant, but when I looked back over it - I thought it could be interpreted as a blanket statement. I think a moratorium on new construction - for even six months - would be a good thing. However, that would affect employment in the construction trades and that makes my queasy. The last thing I want to see is more folks out of work. It is a double-edged sword kind of situation.
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That said, could you please cite the source of your data above?
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I didn't put a huge amount of research into it because I was only looking for a magnitude. However the prices came from Altos Research and I picked a value of 2007 value of $245K. (Carolina MLS shows $220K but it includes a lot more than Charlotte) It has in fact been higher than this. I used $134K which came from the 2000 US census for Charlotte. This yields a 82.8% increase which I rounded down to ~80% given that I only wanted a magnitude and this is the period where homes are considered to have been at their maximum here. Altos currently lists the median price for Charlotte at $199K which is close to the Observer article.
For income, I used numbers very close to yours, but to make it a fair comparison, I also normalized it against the federal reserve note value over the period. In doing show, one finds that actual income dropped. The reason for this is that you have to check to see if income is staying ahead of inflation because not 100% of income is devoted to housing.
It can't be sustained and any real graphs of what is going on indicate that real estate in this county is going to head a lot further down than where they are. Almost anyone that has bought into this mess over the last decade is going to get burnt and badly depending upon where they are on the curve. You don't have to agree with these figures, but any similar effort is going to yield that housing prices are way above what incomes here can really support. Using the average case, it's even more extreme.
Like I was saying earlier, you can't talk about the "housing market" as a whole... You have to quantify what you're talking about in terms of price point because these articles are reporting statistics being propped up by the lower price points which are moving quite nicely. People are DOWNsizing - they're not moving up and taking on more debt.
I'll try to highlight this with a quick CarolinaHome search... I did this for Union County only, so it far from represents the entire area - but it's a good indication of the real issue IMO. Those who are hyping a "recovery" or "turn around" or "uptick in home values" should seriously consider what is going to happen to the existing mid to high price points in the area. Previously these price points were moving because people were turning big housing sales profits into large down payments. This is happening very rarely now and WORSE the people who have those down payments are still steering towards new construction. So compound these numbers with the fact that they do NOT include the open lots in subdivisions all over the area that the developers / builders still want to offload... In many cases, some subdivisions don't even have the common areas finished because they haven't sold enough units. BTW, the numbers also represent a historically slow time in home sales... I would expect that these counts go up dramatically in the Spring when the market is typically highest.
So even if I decided to buy existing inventory over new construction (which is being very competitively priced), I'm faced with a daunting mortgage at the higher price points. For instance, if I put 100k down on a 500k home (20%), I still have to flip a 400k mortgage on a Charlotte salary - where unemployment is so high... How do people make that work on a large scale - or at least enough to put a serious dent in this inventory?
That's the question you need to answer if there's going to suddenly be a "recovery". These are the factors I'm considering when I say that the market still has to come down - YES, even in Charlotte the home prices overall are still way too high. Bubble or not.
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